SME Partnership of the Year 2024 nominee: HSBC Kinetic & Strands
We are unveiling the candidates for the SME Partnership of the Year, showcasing collaborations that have significantly influenced the SME ecosystem by fostering growth and innovation for businesses. Take the opportunity to acquaint yourself with this outstanding nominee and draw inspiration from their remarkable journey.
HSBC Kinetic and Strands partnered to deliver customised financial insights to SME customers. The tools help them to save time on admin and understand their business better. Real-time cashflow and spend analytics tools enables them to identify and act on the activity in their account.
Partnership overview - how do you address primary challenges for your institution or enhance offerings for your SME clients?
Innovation through collaboration
At the out-set we wanted to materially change business banking by providing our customers with innovative tools and partnerships that elevate their banking experience. Independent research shows that SME’s can spend up to 15 hours a week on financial tasks (accountingage.com), to address this pain point for our customers, we decided to partner with Strands, a company that has revolutionised SME financial management. They offer cutting-edge cashflow and spending analytics, empowering businesses with insights for strategic growth. Their digital banking software uses real-time data to create actionable insights, drive engagement and revolutionise customer experiences. This analysis of financial behaviour helps financial institutions to anticipate their customers’ needs. Strands has deep expertise in the Small Business innovation arena and has pioneered Small Business engagement solutions globally.
Specify what unique features and advantages your partnership provides to SMEs. How do these features set the project apart from competitors in the market?
While we recognise that core banking products are essential elements of a mobile bank account, we believed that we could bring more to the table by introducing bespoke tools that help business owners leverage their time and understanding of their finances. For SMEs, understanding cash flow and spending is crucial for sustaining and growing their businesses. Cashflow analysis provides a clear picture of their financial health, helping identify trends, manage liquidity, and forecast future financial needs. Spending analytics, offers insights into expenditure patterns, enabling SMEs to optimise budgets, reduce unnecessary costs, and make strategic investments. These tools collectively empower SMEs with data-driven decision-making capabilities, crucial for navigating the competitive business landscape and ensuring long-term sustainability.
By integrating Strands analytics into HSBC Kinetic's mobile banking platform, they offer SME clients a comprehensive, user-friendly tool for financial oversight and strategic planning.
What sets this partnership apart is the combination of HSBC Kinetic's robust banking infrastructure with Strands leading-edge analytical tools. This synergy offers SMEs a unique dual advantage; secure, reliable banking services, and sophisticated, yet accessible, financial analytics. This collaborative product stands out in the market for its ability to provide SMEs with actionable insights, enhancing their financial agility and strategic foresight in a competitive business landscape.
What are the reasons for choosing a partnership for this solution? Why was a collaborative approach preferred over an independent one?
Relevant insights for efficiency and growth
We wanted to give our customers more than the standard products that come with a mobile bank account. Having identified that one of the pain points for SME’s is admin and cashflow monitoring, the collaboration with Strands was a natural choice. It meant that customers would get personalised digital banking using their own data. The decision to partner with Strands.com was driven by a shared vision of empowering SMEs with advanced financial tools. A collaborative approach was chosen to leverage Strands.com's specialized expertise in data analytics, which complemented HSBC's banking strengths.
Erdi Karaca, Co-Head of HSBC Kinetic says “This partnership offered several advantages over solo efforts, including accelerated development, pooled resources, and a blend of diverse expertise ensuring a more comprehensive and effective solution for our SME clients. One of the key strengths of working with Strands was the ability to embed and deploy a customised solution entirely within the HSBC cloud architecture that enabled the bank to keep all their customer and bank data within their architecture, instead of having to share this with a SaaS provider”.
How the partnership was formed? Did you encounter any major obstacles during its execution? What is the current situation?
We identified core products that we could use from Strands and integrated them into our platform
We integrated Strands Business financial management product/suite, including budgeting features, financial calendar, invoice reconciliation, to streamline businesses operations, Transaction categorisation, spend analysis, cashflow monitoring forecasting.
We incorporated their Engager feature that enabled actionable customer insights.
We used Strands Open Hub third party integration with accounting software providers, allowing business customers to have a holistic financial and non-financial view of their finances.
The partnership was formed through a strategic alignment of goals and capabilities between HSBC Kinetic and Strands. Initial discussions focused on addressing SMEs' financial management challenges, leading to a joint development plan.
Edoardo Borsari, Managing Director at Strands says: “Our partnership with HSBC Kinetic is thriving, and enhancements to our integrated solutions are ongoing. Through collaboration, we navigated obstacles that included aligning and integrating complex technical systems, overcoming language barriers and being sensitive to HSBC’s highly regulated ecosystem. We successfully met challenges through effective communication and a shared commitment to our vision.”
What are the important milestones and achievements of this partnership that have made you a leader in this field?
The collaboration resulted in customers having access to
- Transaction categorisation: This is a Smart engine for auto categorisation of transactions, and it enables customers to manually re-categorise
- Spend analytics: The advanced spend analytics tool enables analysis and tracking of spend by category.
- Cashflow forecasts: The solution helps customers to visualise financial health and trends through intuitive, auto-scaling cashflow (historical and forecasted) for up to three calendar months in advance.
- Insights: Personalised and relevant insights with actionable recommendations enabling the bank to surface other services that may assist the customer.
- Accounting integration: Open finance solutions through external integration of bookkeeping software providers to simplify financial admin and stay on top of invoices, bills and tax commitments.
User statistics
The HSBC Kinetic Insights features are proving to be very popular with our customers with over 93% of the insights delivered to them being actionable. This means that they were presented with options and or solutions to improve their money management. In 2022 around 53% of customers engaged with the feature every month (over a 12-month period). When presented with solutions emanating from the data 54.5% of customers took action.
Global impact and innovation
A testament to the innovative strength of HSBC Kinetic is the broader application of its developed collaborative technologies and their usability across HSBC's global business units. The insights and tools crafted for HSBC Kinetic have been adapted and implemented in various international markets, demonstrating the platform's versatility and the global relevance of its innovations. This global adoption underscores HSBC Kinetic's role as a leader in banking innovation, setting benchmarks not only for SME banking but across the wider financial sector. Underscoring our commitment to broader application of our technology, HSBC was named as “Best Bank for Corporates and Best Bank for SMEs” in the UK at the Euromoney Awards for Excellence. They recognised our SME proposition” highlighting the surge in demand for both the HSBC UK Business Banking app and HSBC Kinetic.
Milestones and achievements
Since its inception, the partnership has achieved significant milestones. Key achievements include the successful integration of Strands analytics into the HSBC Kinetic platform, the launch of a user-friendly interface for SME clients, and positive feedback from early adopters indicating improved financial management and decision-making. The project has also seen a growing adoption rate among SMEs, affirming its relevance and impact in the market. The successful application of HSBC Kinetic's innovations in other global markets further highlights the project's success and far-reaching impact. The HSBC kinetic app has won several awards including Moneynet Best Mobile App Based Current Account and Best Current Account.
Conclusion
The HSBC Kinetic and Strands partnership stands as a beacon of innovation and practical solution-oriented strategy in the financial sector, particularly for SMEs. Our initiative directly addresses the core challenges faced by SMEs in financial management, providing them with critical tools for cash flow analysis and spending analytics. The unique combination of HSBC Kinetic's banking expertise and Strands.com's advanced data analytical prowess has resulted in a product that not only simplifies complex financial data but also empowers SMEs with actionable insights for strategic decision-making and growth.
For more information, visit HSBC Kinetic website
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